MACAU BUSINESS
A restructured playing fi eld
By Tony Lai W
ith its position cemented for years as the world’s largest gambling hub after overtaking the Las Vegas Strip in terms of gross gaming revenue in 2006, Macau is likely to lose the crown to its western rival
this year as it is still embroiled in the turmoil in the post-COVID era. Moreover, the Las Vegas Strip is not the only one that is challenging the reign of the city. Macau is also expected to face more fi erce competition from other gaming jurisdictions in the Asian region, including existing and new markets, gaming analysts and observers say. Latest offi cial data show the gross gaming revenue in Macau reached nearly MOP26.67 billion (US$3.33 billion) in the fi rst seven months of 2022, plunging by 53.6 per cent year-on-year. This dreary result was mostly due to the local community COVID-19 outbreak in June and July and the strict border restrictions in place for the “zero-COVID” policy, as well as Beijing’s crackdown on cross-border gambling and capital fl ight. While Macau remains the largest gambling market in the
Asia-Pacifi c region, albeit on a grim recovery path, other jurisdictions in the region have come out of the slump at a much faster pace. The casino sector in the Philippines reported a year-on-year rise of 144.2 per cent in gaming revenue in the second quarter of this year to PHP45.89 billion (US$824.2 million), while the performance of Singapore’s two gaming operators — Genting Singapore and Marina Bay Sands—has also improved, with the latter seeing a year-on-year hike of 185 per cent in adjusted EBITDA in the three months to 30 June 2022. According to Bloomberg Intelligence, Macau only
recovered to about 18 per cent of the 2019 level in the fi rst half of this year, while the Philippines and Singapore recuperated back to 79 per cent and 68 per cent of the pre-pandemic levels, respectively. For the calculations of the Philippine gaming revenue, the fi nancial research consultancy only counted the revenue generated by the casino resorts in Entertainment City in the country’s capital Manila, which made up about 70-80 per cent of the country’s casino gaming revenue.
Bigger share, smaller pie
It is expected the Macau gaming industry will face increasing competition from its Asian rivals in the post-COVID era, as it taps into the market of non-Chinese high rollers amid Beijing’s crackdown on cross-border gambling and the exodus of veteran industry professionals
20 OCTOBER 2022
“The [gaming] performance of Southeast Asian countries is more impressive after the pandemic,” said Angela Han Lee, a gaming and hospitality analyst for the Asia-Pacifi c region at Bloomberg Intelligence. “We’re more concerned about the Macau recovery because of China’s economy… [which] has been pretty weak because of all these geopolitical tensions between China and other countries in the world, mostly with the U.S. [United States].” Delivering a presentation to G2E Asia 2022 Special Edition: Singapore — a three-day major gaming industry trade show that was relocated from Macau to the island country for the fi rst time in late August due to the travel restrictions in Macau — Ms Lee added the downfall of junket operators dampened the recovery of the Macau market. She refers to the closure of many Macau junket operators since the end of last year following the arrests of junket bosses Alvin Chau Cheok Wa and Levo Chan Weng Lin.
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